Hong Kong's Aviation Industry Soars to New Heights

The article discusses the Hong Kong government's support for the city's aviation industry, particularly Cathay Pacific Airways, and the potential benefits of the "Air Silk Road" strategy. It highlights the government's investment in Cathay Pacific during the pandemic, the airline's recent financial performance, and the expected increase in business exchanges and ties between Hong Kong and the Middle East.

Unlocking the Potential of Hong Kong's Aviation Dominance

Strengthening Hong Kong's Status as an International Aviation Hub

The Hong Kong government has expressed its commitment to supporting the city's aviation industry and enhancing its status as an international aviation hub. Financial Secretary Paul Chan emphasized the importance of local airlines actively expanding their route networks to meet the needs of economic development, business connections, and public travel. This aligns with the government's goal of facilitating the country's "Air Silk Road" strategy, which is the aviation connectivity component of President Xi Jinping's Belt and Road Initiative.The "Air Silk Road" is expected to spur bilateral trade with the more than 100 countries involved in the broader Belt and Road Initiative. Chan highlighted the unique advantages Hong Kong holds under the "one country, two systems" governing principle, urging the authority that manages the international airport to continue contributing to national development.

Cathay Pacific's Resurgence and the Government's Role

The article notes that Cathay Pacific's ability to fully buy back the preference shares issued to the government during the pandemic marks a "steady return of Hong Kong's aviation industry to full normality." In 2020, the government had invested HK.3 billion in Cathay Pacific, comprising HK.5 billion for preference shares and HK.8 billion in bridging loans, to help the airline survive the financial difficulties caused by the collapse of the global travel market.Chan described this investment arrangement as a "win-win" situation, where Cathay Pacific gained financial liquidity, was able to survive its challenges, and restore capacity fairly quickly. In return, the government's investment brought a return of nearly HK billion to its coffers.Cathay Pacific's recent financial performance has been encouraging, with the airline reporting a net profit of HK.78 billion in 2022, its first since 2019, after a net loss of HK.62 billion in 2022. However, the company has pushed back its original plan to return to 100% passenger capacity from the end of 2024 to the first quarter of 2025.

Strengthening Hong Kong-Middle East Ties

The article also highlights the expected increase in business exchanges and closer ties between Hong Kong and the Middle East, following Cathay Pacific's relaunch of a direct flight to the capital Riyadh in October. This comes after a connection between the kingdom and Shenzhen, which got its first non-stop flights to the city on June 3 via China Southern Airlines, while Guangzhou also has direct services to Kuwait and Riyadh.Chan believes that more convenient transport between Hong Kong and the Middle East will definitely strengthen closer exchanges between the two markets, bring together more new funds, and create more new opportunities for Hong Kong's financial market.The government's support for the aviation industry, particularly Cathay Pacific, and the potential benefits of the "Air Silk Road" strategy, suggest a bright future for Hong Kong's aviation dominance. As the city continues to leverage its unique advantages and strengthen its international connections, the aviation industry is poised to play a crucial role in Hong Kong's economic development and global integration.